Archive for Wednesday, January 10, 2001

City council considers levying tax on guests at local motels

January 10, 2001

The Tonganoxie City Council began discussing an option at Monday night's meeting that would bring additional revenue to the city.

At the suggestion of Chris Clark, city administrator, council members discussed adoption of a transient guest tax, a fee charged on local hotel or motel rooms occupied for 28 or fewer consecutive days.

"The primary goal of this initiative is to build a revenue source for existing and future needs," Clark said in a report to the council. "Currently, the city has only two establishments. The pending opening of the Kansas Speedway has the potential to create interest in an additional facility. Speedway officials have indicated that they would draw persons from a 600-mile radius of the track. Tonganoxie's location could become more lucrative for new businesses (such as hotels) that come to town."

The city is considering a 4 percent tax, which would require a charter ordinance to amend a state statute. The other option would be 2 percent, which would not require a charter ordinance. However, city officials indicated Monday night they would prefer the 4 percent tax.

"We ought to do it," said Kathy Graveman, council member. "It's definitely a way to hit people staying and using the facilities."

Council members Ray Usher and Pat Albert agreed.

Some surrounding cities already charge a transient guest tax. Those include DeSoto, Gardner, Marysville, Osawatomie, Lansing and Leavenworth. Leavenworth, Lansing, DeSoto and Gardner all use 4 percent. Revenues for 1999 were between $28,918 in Gardner and $60,163 in Leavenworth. Osawatomie and Marysville charge a 2 percent tax and generated $7,782 and $18,355 respectively.

If Tonganoxie adopted its own transient guest tax, Mike Crow, city attorney, said the money would go to the state and come back to the city, just as other tax money is handled.

Some questions remain about the use of the tax revenues, Crow said. The tax is to be used toward tourism and promoting the city. He's not sure about the exact definitions of "promotions."

The council likely will consider an ordinance calling for a 4 percent tax at its Jan. 22 meeting.

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